The new scheme is more extensive in its coverage as compared to the first PLI and the objective is to help boost pharma production of India over a longer term.
Indian government will pick a maximum of 55 applicants based on clearly laid out selection criteria under the new Production-Linked Incentive (PLI) scheme that offers a total of Rs 15,000 crore in incentives over a six year period till FY27, for the identified pharma products, according to operational guidelines by Department of Pharmaceuticals, under Ministry of Chemicals and Fertilizers.
“An applicant, through a single application, can apply for more than one product and the products applied by an applicant can be in any of the three categories,” DoP said in a statement.
“The applicants will be required to achieve minimum cumulative investment per year over a period of 5 years as prescribed under the scheme. The investment could be under new plant and machinery, equipment and associated utilities, research and development, transfer of technology, product registration and expenditure incurred on building where plant and machinery are installed,” the statement added.
Investment made on or after April 1, 2020 will be considered as eligible investment under the scheme.
Thereafter, the selected manufacturers will be able to receive production-linked incentives based on incremental sales of pharmaceutical products for a period of 6 years.
“A selected participant will be able to get a maximum incentive of Rs 1,000 crore, Rs 250 crore and Rs 50 crore, respectively depending upon its group over the period of the scheme,” the government said.
“Additional incentive will be available based on performance but subject to certain conditions. In no case, the total incentive including additional inventive, would be more than Rs 1,200 crore, Rs 300 crore and Rs 60 crore per selected participant, respectively for the three groups over the period of the scheme,” it added.
Category-A is meant for companies that have Global Manufacturing Revenue (GMR) of pharmaceutical goods of Rs 5,000 crore and above in 2019-20. The Category-1 comprises of biopharmaceuticals, complex generics, patented drugs or drugs nearing patent expiry, cell based or gene therapy drugs, orphan drugs, special empty capsules like HPMC, Pullulan, enteric, complex excipients, phyto-pharmaceuticals and other drugs. The eligible Category-A manufacturers were earmarked a total incentive of Rs 11,000 crore.
Category-B is for manufacturers who have GMR of above Rs 500 crore and less than Rs 5,000 crore. The government earmarked Rs 2,250 crore for Category-B products these include Active Pharmaceutical Ingredients and Key Starting materials or Drug Intermediates.
Category-C is for manufacturers who have GMR of less than Rs 500 crore. The government earmarked Rs 1,750 crore as total PLI for formulations such as repurposed drugs, auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti- infective drugs, cardiovascular drugs, psychotropic drugs and anti- retroviral drugs. The category also includes chemicals and reagents for in-vitro diagnostic devices and other drugs.
An Empowered Group of Secretaries will undertake periodic reviews of the scheme to ensure its smooth implementation along with the other PLI schemes of the Govt. of India.
A Technical Committee will assist the department in all technical issues which arise during the implementation of the scheme. SIDBI, the Project management Agency selected for this scheme, will be responsible for implementation and will be the interface with the industry for all issues with respect to online applications, selection of applicants, verification of investments, verification of sales and disbursal of incentives etc.
The pharmaceutical and the in-vitro diagnostic industry is expected to actively participate in the scheme and contribute to further strengthening the sector.
The government launched the scheme to encourage the pharmaceutical industry to enhance its manufacturing capabilities, diversify the product mix to complex generics, patented drugs, going up the value chain, bringing investment and creating global champions out of India. a new PLI scheme was notified by the government on March 3, 2021.
The new scheme is more extensive in its coverage as compared to the first PLI and the objective is to help boost pharma production of India over a longer term. The category-1 and category-2 products attract 10 percent incentive and category-3 products attract 5 percent incentive on the incremental sales.
Incremental sales of a product mean sales of that product in a year over and above the sales of that product in FY20.